1. Where one creditor has been induced by fraudulent
representations of another creditor, who wishes to get into his own
hands all the property of their common debtor, to release his debt,
and the second creditor does so get the property, and thus obtains
a preference, the creditor who has been thus as above said, induced
to release his debt may disregard his own release, and petition
that his debtor be decreed a bankrupt.
2. If, on a petition and other proceedings regular in form, a
decree in bankruptcy is made in such a case and an assignee in
bankruptcy is appointed in a way regular on its face, the decree in
bankruptcy, though it be a decree
pro confesso, cannot, in
a suit by the assignee to recover from the preferred creditor the
property transferred, be attacked on the ground that the party
petitioning had released his debt, was no creditor, that his
petition was accordingly fraudulent, and that the decree based on
it was void.
Post, assignee in bankruptcy of the Macary Brothers, filed a
bill against Henry Michaels and Nathan Levi, partners, to make them
account for the value of certain merchandise (an entire stock in
trade, worth about $4,200), which Post, as assignee, alleged that
the said Macary Brothers had transferred to the said Michaels &
Levi in fraud of the Bankrupt law.
The case, as it appeared on the weight of evidence and as it was
assumed by this Court to be, was thus:
Page 88 U. S. 399
Harlow Macary and Henry Macary, two young men, aged respectively
twenty-four and twenty-one years, sons of Adam Macary, began
business under the name of Macary Brothers as dealers in ready-made
clothing in August, 1868, at Hudson, Michigan, their father, who
lived at Coldwater, a place about forty miles from Hudson, lending
to them $2,500. At this same place, Coldwater, there lived also a
certain Louis Sloman, a brother-in-law of Henry Michaels, above
named.
By the 25th of October, 1869, Macary Brothers had got a good
deal in debt to other persons. The most important of their debts
were: to Michaels & Levi, already named, $4,600; Beir &
Stern, $476; Sabey & Co., $368; Sloman & Rosenthal, $343;
all these creditors residing at Rochester, New York, and being
wholesale dealers in clothing. The debt to the father had been
reduced to $2,300, but this amount remained unpaid. They owed a few
other small firm debts in their regular business. [
Footnote 1] Henry Macary, who carried on some
little trading in cigars and tobacco, owed certain debts besides,
the largest being to Mowry & Co., of Detroit, about $350, for
which the brothers had given their joint notes and a chattel
mortgage on their stock in trade.
In October, 1869, Michaels set off on a business tour through
the West, and having passed through Coldwater, the place of his
brother-in-law, Sloman's, residence, and stopped there a short
time, arrived at Hudson on Friday, October 22, 1869. He at once, on
the afternoon of that same day, called at the store of the Macary
Brothers, Henry Macary alone being at the store, Harlow being ill
and at home. Michaels knew that the brothers Macary were indebted
to other Rochester houses. He said to Henry Macary that he had come
to Hudson to look over matters there a little between himself and
the firm of Macary Brothers, and asked about how much stock there
was on hand. Henry replied, between $5,000 and $6000. Michaels said
that he thought that there was not so much, and proposed to take an
inventory at cost, a matter which Henry agreed should be done, and
which
Page 88 U. S. 400
they did the next day. When the inventory had been taken,
Michaels asked about the firm debts, and in a general way was told
what they were. He then asked if he might look over the firm books,
proposing to take them to the hotel where he was, with the
inventory of stock as made out. This also Henry agreed that he
might do. The next morning, returning to the store, he said, "You
have about $4,500 worth of goods." Henry replied, "We must have
more." "The invoice figures no more," was the reply. "You have
about enough to pay us." "Have you any proposition to make." Henry
replied that he had no proposition to make until after he could
consult with his brother.
The testimony of Henry, which was taken in the case, thus
proceeded:
"He asked me, if he should throw us into bankruptcy, how much I
thought each creditor would get. I told him I did not know. He said
to me, 'Your father would get about ten cents on the dollar, and we
would get about the same.' He said, 'Henry, I don't want any
underhanded game undertaken with me.' I told him there was none;
that the goods were all on the shelf, and that the books would show
the accounts. He said,"
" I don't want to injure you in any way or throw you out of
business; but I see no way not to do it, unless I take the stock of
goods and run the store myself until such time as I get my
pay."
"I told him, 'I would do nothing until my brother was present;'
I think it was then near six o'clock; and he went to tea. About
seven o'clock on the same day (the 23d), he came to the store and
remained there till I closed it for the night. Before we closed it
he said,"
"I will look these books over more tonight, and you come to the
hotel, at my room, tomorrow about two o'clock."
"He then asked me if I had any objections to letting him have
what money I had on hand, as it was best to make the amount I owed
him as small as possible. I told him I had no objection, and handed
him what money I had, $110. I then closed the store and went home.
I went to the hotel where he was the next day and saw him there. He
asked me if I had any proposition then to make. I told him I had
none. He asked me what we proposed to do. I told him I did not know
what to do. He then said,"
"I have a proposition to
Page 88 U. S. 401
make to you. It is that I shall buy the stock of goods and run
the store in a third party's name, leaving you and your brother in
the store, and to conduct the business the same as you have, and
pay the expenses of the store and remit the balance to me."
"He had before said, in this conversation,"
"I will restock this store with new goods and furnish you what
goods are necessary to conduct the business, and in the meantime I
will have Rudolph, my agent, find a better place for business than
Hudson, and after the first of January we will move the stock to
the place he shall select. I will restock the store with new goods
at that place, and you and your brother shall conduct the business
the same as you have done."
"He then asked me how the proposition suited me. I told him I
did not know how that would do, but if we were not thrown out of
business, it was satisfactory to me if the agreement was fulfilled.
I then told him that we would have to see my brother before
anything was done. Mr. Michaels and myself went to the house where
my brother was; went upstairs and saw him. Mr. Michaels told him he
had made a proposition to me, and we had come there to talk with
him about it. Mr. Michaels then stated the proposition over to my
brother as he had stated it to me. My brother then asked him, in
case we should sell the stock to him, what would become of our
other creditors, and what we 'should do in case they should present
their bills.' Mr. Michaels said, 'Pay no attention to them; they
can't do anything.' Mr. Michaels then asked my brother who the
third party should be. My brother proposed the name of David Bovie,
of Coldwater, Michigan, who was master of our lodge. Mr. Michaels
said, 'I do not know him; it must be somebody that I know.' He said
'Louis Sloman, for instance.' He said, 'You know Louis; he lives
here, and he will do just as I tell him to.' My brother said, 'I
think we ought to have some choice in this matter.' Mr. Michaels
said, 'It don't make any difference what you think, it must be as I
want it.' My brother said, 'Does Louis Sloman understand this, Mr.
Michaels?' Mr. Michaels says, 'He does; he will do just as I tell
him.' Mr. Michaels said, 'Boys, I think this is the best thing you
can do, and you will think so too after a little.' He then
said,"
"I think that one of you had better go to Coldwater with me and
see your father Monday, so that he will understand it and will not
make you any trouble, as he is one of your creditors."
"We then went to dinner. While at
Page 88 U. S. 402
dinner Mr. Michaels said, 'Boys, I think you will come out all
right now. I have known cases a good deal worse than yours having
come out all right.' That was all that was said till Monday, that I
remember of now. Mr. Michaels asked my brother if he would be at
the store Monday morning. He told him he would, about ten o'clock.
Mr. Michaels went to the hotel."
"Monday morning, October 25, 1869, Mr. Michaels came to the
store and returned the books. My brother, who was then there, asked
him to restate the proposition he had made the day before. Mr.
Michaels restated his proposition as he had stated it the day
before. I think my brother then asked him what would be done with a
chattel mortgage of about $400 on the stock of goods that Mowry
& Co., of Detroit, held on the goods. Mr. Michaels said he did
not care anything about that; he would make that all right. Mr.
Michaels then asked which one of us would go with him that
afternoon to Coldwater. I asked my brother to go. He said to me,
'You had better go.' Mr. Michaels said, 'Henry, I think you had
better go; I want you to go.' Mr. Michaels then asked my brother to
give him a writing authorizing me to sign the firm name to any
transfer or sale of the stock of goods that might be made at
Coldwater. My brother gave him the writing he required. Mr.
Michaels then said to me, 'Telegraph to your father, so that he
will be sure to be at home.' I did so telegraph my father. Mr.
Michaels and I went to Coldwater that afternoon; we arrived between
four and five o'clock. On our arrival, Mr. Michaels said to me,
'You go home and get your father and come to Mr. Shipman's office,
and I'll be there.' Mr. Shipman is an attorney. I left Mr.
Michaels, went to my father's, and he and I went to Mr. Shipman's
office together. We there found Mr. Michaels, and I introduced him
to my father. Mr. Michaels then told my father that he had sent for
him to talk with him about the matter between his (Michaels) firm
and the firm of Macary Brothers. My father asked him what the
difficulty was. Mr. Michaels said we were in a bad condition and he
wanted to help us out; that he did not want to see us thrown out of
business. My father then asked him what he proposed to do. Mr.
Michaels told father he proposed to buy the stock of goods and run
the store himself through a third party; that my brother any myself
were to conduct the business the same as we had done; that
Page 88 U. S. 403
he would restock the store with such goods as were needed, and
keep it stocked; that we should keep the store in Hudson till the
1st of January, and during this time he would have Rudolph, his
agent, find a better place for business than Hudson was, and would
then move the stock to such a place as Rudolph should select; that
we were to receive the profits from the goods after expenses of the
store had been paid, and he should receive his pay for the goods
and we should have our living out of the profits on the sale of the
goods. Mr. Michaels stated that we should go with the goods to this
place and take charge of the business the same as we had done
before. He then said to my father, in order to do this he (father)
would have to withdraw his claim, so that he would not make us any
trouble until such time as he, Mr. Michaels, had got his pay; then
the stock should revert back to the firm of Macary Brothers, the
same as it was before the sale was made. My father then said to Mr.
Michaels, 'Ought I not to have some writing from you to show this?'
Mr. Michaels said, 'That is not necessary, as I have always done by
the boys, and always intend to, as I have agreed.' Mr. Michaels
then asked me if I had confidence in him, that he would do as he
said -- as he agreed to. I told him that I had. Father said if Mr.
Michaels did as he agreed, it was all right. I think that was all
that was said till Mr. Shipman came in and drew up some writings.
He drew up two or three writings. He read them over to Mr.
Michaels. They did not suit Mr. Michaels, and Mr. Shipman tore them
up. I think then Mr. Shipman said it was his tea-time, and we had
better go to tea and come in after tea."
"After tea, my father and myself went back to Mr. Shipman's, and
found Mr. Michaels and Mr. Shipman there. Mr. Shipman was writing a
bill of sale. Mr. Shipman asked if the invoice that Mr. Michaels
had should be the price of the goods. Mr. Michaels said, 'No, it
will not look well; it will look as though we intended to defraud
the other creditors.' Mr. Michaels said we had better make it
seventy-five cents on a dollar, so that it would look as though we
did not mean anything wrong. Mr. Shipman then finished the bill of
sale, and also drew up a receipt for my father to sign."
"Mr. Michaels then said, 'I will go over to get Mr. Sloman to
come over to the office,' and Mr. Sloman came to the office, and
Mr. Shipman then read the bill of sale, and also the receipt,
Page 88 U. S. 404
and then the papers were signed. I signed the bill of sale, and
father signed the paper prepared for him to sign."
That paper is thus:
"Macary Brothers, of Hudson, Michigan (who are my sons), being
desirous of selling their stock of merchandise and goods in said
place, to Louis Sloman, but the said Sloman being afraid of their
creditors, to confirm said sale and his title, and in consideration
that he should buy them out, I do hereby acknowledge receipt in
full of all demands against the said Macary Brothers to this date,
October 25th, 1869."
"A. MACARY"
"Then there were three notes drawn up for six, nine, and twelve
months. The price of the goods was divided into four equal parts,
and the cash was one of these quarters, and the notes were of equal
amount. Then Mr. Sloman signed the notes, and handed the notes and
the money to Mr. Shipman. Mr. Shipman handed them to Mr. Michaels.
Mr. Michaels did not take them; he said, 'Hand them to Henry
(meaning me), and let him hand them to me.' Mr. Shipman handed the
notes and the money to me, and I handed them to Mr. Michaels. Mr.
Shipman then wrote a receipt. This interview after tea lasted about
an hour. I returned to Hudson the next morning, Tuesday morning. On
that day (Tuesday, October 26, 1869), Mr. Sloman came to our store
and said that he had come to make out a list of what goods we
needed, so as to send it to Mr. Michaels. My brother and Mr. Sloman
looked through the stock, and made out a list of what goods we
needed. Mr. Sloman made some proposition in regard to some goods he
thought we ought to have, and Mr. Sloman took the list and went
away. The value of the stock of goods on the 25th day of October,
1869, as nearly as I can estimate, was about $5,000."
Harlow Macary, the other brother, was also examined. Confirming
generally Henry's statement, so far as it related to matters in
which he, Harlow, had been an actor, he added:
"My brother returned from Coldwater on Tuesday morning, early.
Sloman came to Hudson on the same day. The first thing Sloman
wanted to know, was, what we were going to do with the mortgage on
the stock of goods. I told him I did not know, that we wanted to
fix it some way. He said, 'Suppose you transfer your book accounts
to me towards it.' I transferred the book accounts
Page 88 U. S. 405
to him. I gave him also the proceeds of sales for part of the
week. He then wanted that I should turn over to him a cow that I
owned. I told him, 'No, sir; not so long as my name is Macary.'
Sloman then said, 'I propose to move this stock to Coldwater.' I
asked him why. He said he owned it. I asked him how he got it. He
said he bought it of Michaels; I asked him where and when. He said
in Coldwater, last Monday; meaning Monday, the 25th of October. I
told him that I did not understand it so. He said that made no
difference, and proposed to move that stock of goods that day. He
ordered myself and my brother to help his clerk to pack up the
goods that day. I told him there would be no goods packed that day
in that store. He told his clerk to go to packing up the goods. I
forbid them both from touching a dollar's worth of goods, and the
result was that Sloman demanded the goods, which I refused to
grant, and subsequently I locked up the store; after which the
sheriff broke open the store and took possession of the goods under
a writ of replevin, and has held them ever since. This replevin
suit was in behalf of Sloman, as plaintiff, and the goods were
delivered to him by the sheriff."
The father was examined also, and confirmed, so far as respected
his action, what his son Henry had stated.
After Michaels and Henry Macary had agreed to go over to
Coldwater, the former sent this telegram to his brother-in-law,
Louis Sloman:
"HUDSON, October 25, 1869"
"L.S. -- Expect me next train. Tell lawyer to be in office."
"H. MICHAELS"
Sloman accordingly met Michaels at the station.
After the deed of sale and other papers were executed at
Coldwater, Michaels left the place, leaving it on the train of that
night. On reaching home, he adjusted the claims of the other
Rochester creditors, taking their discharges in full. None of them
made any claim nor proved any demand in the bankruptcy proceedings.
Sloman paid Mowry & Co. Certain other creditors mentioned
hereafter, [
Footnote 2] and
having debts amounting in all to $304.08, proved them.
Page 88 U. S. 406
Michaels himself and Sloman were also examined as witnesses.
They did not disprove the leading facts stated by the Macary
Brothers -- that is to say, they did not disprove the fact of the
debt due to Michaels & Levi, the insolvency of the brothers
Macary; the visit of Michaels to Coldwater; his visit immediately
afterwards to Hudson, and interview with the brothers Macary, and
arrangements for a sale of the stock, and the extinction of the
father's claim; the telegraphing to Hudson; the meeting in the
office of the lawyer, Mr. Shipman, there, and the signing of
papers, and the supposed conclusion of all these things. They
omitted to state many incidents stated by the Macary Brothers, and
toned down or changed the coloring which they gave to the leading
facts testified to by them, and some minor matters, and all
fraudulent motives they denied. But, as this Court assumed on the
evidence, the case in its great features stood.
In the state of things above described by these witnesses, Adam
Macary, the father, on the 19th day of November, 1869, and of
course after he had signed the paper on p.
88 U. S. 404,
releasing his debt, filed a petition in the District Court for the
Eastern District of Michigan, representing himself still to be a
creditor of the Macary Brothers for $2,200; that they were
insolvent, and that they had committed an act of bankruptcy by the
sale of their property to Sloman; the same being alleged to have
been done with an intent to give a preference to Michaels &
Levi. The petition, which was set out in the case below, was
regular in form, and assuming it to be true, made a plain case
within the thirty-fifth section of the Bankrupt Act, quoted
supra, p.
88 U. S. 361.
The Macary Brothers put in no defense, and were decreed bankrupts
on the 1st of December, 1869, on their father's petition as
aforesaid, and one Post was appointed their assignee in
bankruptcy.
Post, as such assignee, now filed his bill in the court below
against Michaels & Levi, to recover the value of the stock of
goods assigned to Sloman, alleging that the sale was really to
Michaels & Levi, or if not, that they got the benefit of it to
the exclusion of other creditors, and were in
Page 88 U. S. 407
either case preferred within the meaning of the thirty-fifth
section of the Bankrupt Act already referred to.
The defendants denied all the plaintiffs' allegations, generally
and specifically:
Alleged that the sale was made to Sloman with the assent of Adam
Macary, the father and petitioning creditor, and in consequence of
his releasing his claim:
That Adam Macary, the party petitioning for a decree of
bankruptcy, was in fact no creditor at all of his sons; that he had
released his debt; that the court which had made the decree in
bankruptcy accordingly had no jurisdiction in the case, the
Bankrupt Act in its thirty-ninth section making, in terms, a decree
of bankruptcy on the petition of a person other than the debtor
legal only on the petition of one or more of the debtor's
"creditors, the aggregate of whose debts, provable under the act,
shall amount to at least $250:"
That the whole proceeding in the district court was by collusion
and fraud between the party calling himself the petitioner,
creditor, and the so-called debtors, and therefore void, and that
there were no other creditors who could have petitioned:
That if Michaels & Levi were guilty of any fraud, Adam
Macary was a participant in it and could not profit by it.
On the hearing of the case, it was stipulated in open court by
the parties as follows:
"Henry and Harlow Macary were adjudicated bankrupts on the 1st
day of December, A.D. 1869, by the District Court of the United
States for the Eastern District of Michigan, upon the creditor
petition of A. T. Macary. Such adjudication was made in the
ordinary manner upon default. Such proceedings were thereafter had
that the complainant was on the 8th day of January, 1870, appointed
assignee of said Henry and Harlow, and that he duly qualified as
such, and entered upon the performance of the duties of said trust;
that on the 13th of January, 1870, Hovey Clarke, register in
bankruptcy, to whom said bankrupt proceedings were referred,
executed and delivered to the complainant an assignment in due
form, of all the estate and
Page 88 U. S. 408
effects of said bankrupts, a copy of which, duly certified, is
produced on the hearing, to be read as evidence on said hearing,
and filed in said cause; that debts have been proved before said
register against said bankrupts as follows,
viz.:"
F. B. Schermerhorn, of Hudson, for printing . . . $ 93.48
Miller & Co., Syracuse, cigars. . . . . . . . . . 58.75
A. Judson, Chicago, mittens and gloves. . . . . . 84.50
Northrup & Richards, Bro'dalbin, N.Y., gloves . . 36.00
Charles B. Northrup, Detroit, furnishing goods. . 31.35
------
$304.08
The court below adjudged that the defendants should pay the
assignee the proceeds of the sale of the goods ($4,213), with
interest and costs, and be debarred from any dividend on the
bankrupts' estate.
From this decree the defendants appealed.
Page 88 U. S. 413
MR. JUSTICE CLIFFORD delivered the opinion of the Court.
Debtors, owing debts to the amount of $300, who have committed
any one of the acts of bankruptcy enumerated in the thirty-ninth
section of the original Bankrupt Act, may be adjudged bankrupts on
the petition of one or more of their creditors the aggregate of
whose debts provable under the act amounts to $250, provided such
petition is filed within the period therein prescribed.
By that section it is declared to be an act of bankruptcy if
such a debtor shall make any assignment, gift, sale, conveyance, or
transfer of his estate, property, rights, or credits, with intent
to delay, defraud, or hinder his creditors, or if, being bankrupt
or insolvent, or in contemplation of bankruptcy or insolvency, he
shall make any payment, gift, grant, sale, conveyance, or transfer
of money or other property, estate, or credits, with intent to give
a preference to one or more of his creditors, and the provision is
that if such a debtor shall be adjudged a bankrupt, the assignee
may recover back the money or other property so paid, conveyed,
sold, assigned, or transferred contrary to that provision, provided
the person receiving such payment or conveyance had reasonable
cause to believe that a fraud on the Bankrupt Act was intended or
that the debtor was insolvent, and the further provision is that
such creditor shall not be allowed to prove his debt in bankruptcy.
[
Footnote 3]
Proof of the most satisfactory character is exhibited in the
record that the debtors described in the bill of complaint were, on
the 1st day of December, 1869, adjudged by the district court of
the United States for the district where the debtors resided to be
bankrupts on the petition of the creditor therein named, and that
such proceedings subsequently took place that the complainant was
duly appointed the assignee of their estate.
Argument to support those allegations is unnecessary, as they
were admitted in open court, and it is equally clear that the
assignee was duly qualified and that all the estate,
Page 88 U. S. 414
real and personal, of the bankrupts was duly assigned and
conveyed to the assignee, as required and directed by the
fourteenth section of the Bankrupt Act. Nor is any discussion of
those matters necessary, as they also were admitted at the hearing
in the circuit court.
Abundant proof is also exhibited to show that the bankrupts,
prior to the commencement of the proceedings in bankruptcy, were
engaged in business as retail traders and that they were largely
insolvent; that the principal means they possessed either to pay
their debts or to support their families consisted of a stock of
clothing, hats, caps and other furnishing goods for gentlemen not
much exceeding in value the sum of $4,000, and that they sold and
conveyed the whole of their stock of goods, on the 25th of October
preceding the date of the decree by which they were adjudged
bankrupts, at the instigation and for the exclusive benefit of the
appellants, who were their largest creditors.
Such sale and conveyance having been made less than a month and
a half before the vendors were adjudged bankrupts, the assignee
claimed that the sale and conveyance were null and void and that
the attending circumstances were such that it became and was his
duty as such assignee to take proper measures to cause the goods or
their proceeds to be restored as belonging to the estate of the
bankrupts, and to procure, if practicable, a decree that the
purchasing creditors should not be allowed to prove their debt
against the estate of the bankrupts.
Pursuant to that view the complainant instituted the present
suit in which he alleges, among other things, that the appellants
held demands against the bankrupts exceeding $4,000 and that, the
appellants becoming fearful that they should lose their claim and
being anxious to have the same paid or secured, they, or one of
them in behalf of the firm, made a visit to the bankrupts at their
place of business, and that while there, they took an inventory of
their stock of goods and proposed to buy them out and leave the
goods in the store of the vendors and permit them to continue their
business and to sell the goods for the vendees at such prices
Page 88 U. S. 415
as they, the vendors, could get for the same and to account to
the vendees at the prices which they, the vendees, should mark the
goods at the time of the sale, with the right on the part of the
vendors to keep the balance for their commissions in selling the
goods; that the respondents also proposed, as the complainant
alleges, in order to induce their debtors to consent to the
proposed arrangement, that they, the respondents, would furnish
them additional goods to sell, on the same terms, as they, the
debtors, should need thereafter to keep up their stock; and the
further allegation is that the respondents also suggested that in
order to have the transaction "look all right," it would be better
to have the goods transferred to some third person, naming the one
to whom the goods were subsequently conveyed for their benefit.
Objections were at first made by the debtors, but they finally
acceded to the proposal and assigned and transferred their entire
stock of goods to the person named by the respondents, he, the
nominal grantee, paying therefore the sum of $4,000 in money,
drafts, and his promissory notes, all of which were immediately
handed over to the persons for whose benefit the sale and purchase
were made, and that they gave to their debtors a receipt in full of
all demands.
Beyond all doubt, the debtors expected to remain in the
possession of the goods and to be permitted to sell the same on
commission, but the complainant alleges that the nominal vendee, in
a few days thereafter, acting under the advice and instructions of
the real purchasers of the goods, made a demand of the same from
the debtors, and that the latter having refused to surrender the
possession, the person who made the demand sued out a writ of
replevin against the debtors in possession and succeeded in
recovering the goods, which, with a few outstanding accounts,
constituted the entire property of the debtors, and that the taking
away the said goods from them as aforesaid left them stripped of
all means of paying their other creditors, to whom they were
largely indebted, and several of whom have since proved their
claims against the estate of the bankrupts.
Prefaced by these allegations, the complainant charges in
Page 88 U. S. 416
the bill of complaint that the entire transaction of the
pretended sale and transfer of the goods and of the payment of the
price by the money and notes was but a scheme on the part of the
respondents to obtain a preference over other creditors within four
months before the petition in bankruptcy was filed, in violation of
the express provisions of the Bankrupt Act, and that the
respondents knew all about the pecuniary condition of the debtors,
and knew that their assets were not equal in value to their
indebtedness and that they were insolvent.
Superadded to that, the complainant also charges that the sale
and transfer of the goods and the turning over of the money and
notes to the respondents were not made and done in the ordinary
course of the business of the debtors, and that the respondents had
reasonable cause to believe at the time of the transaction that the
pretended sale and transfer were made in fraud of the provisions of
the Bankrupt Act. Wherefore the complainant prays that the sale and
transfer may be decreed to be, in effect, a sale and transfer to
the respondents, and if not, that they may be decreed to account to
him as such assignee for the money and notes so turned over and
transferred to them as aforesaid, and that the respondents may be
decreed to have lost any and all claim to any share or dividend in
the estate of the bankrupts.
Service was made and the respondents appeared and filed an
answer, as follows:
(1) They deny each and every of the allegations and statements
of the answer.
(2) They allege that the vendee of the goods made the purchase
of the debtors without any intention of defrauding, or in any way
or manner affecting, the creditors of the vendors, and without any
knowledge or information that the owners of the goods had any other
creditors that could in any way be affected by the said purchase,
and that the purchase was made by him with the consent and
approbation of the petitioning creditor in the bankrupt
proceedings.
(3) That the proceedings in bankruptcy were void and of no
effect, and that they were collusive and a fraud upon the Bankrupt
Act;
Page 88 U. S. 417
that the petitioner in the case was not in fact a creditor of
the bankrupts, and that the proceedings were instituted and
prosecuted at the request and in the interest of the bankrupts, and
with their consent, contrivance, and approbation, and by collusion
with them.
(4) That the proceeds of the sale were paid over to the
bankrupts and were received by them with the consent and
approbation of the petitioning creditor, who is their father, and
that he was present and consented to all that was done in respect
to the sale of the goods and the disposition of the proceeds, and
they deny that there are other creditors who would or could
institute such proceedings against the bankrupts.
Evidence was taken on both sides and the parties were fully
heard, and the circuit court entered a decree for the complainant,
as follows:
(1) That the complainant recover of the respondents, principal
and interest, the sum of $4,213.69 and costs of suit.
(2) That the respondents be and they are hereby adjudged to have
lost any and all claim to any share or dividend in the property of
said bankrupts or in any property, money, or effects obtained or to
be obtained by the complainant by this decree, or from any share in
the estate of the bankrupts in the hands of the complainant, as
such assignee.
Subsequently, a final decree was entered and the respondents
appealed to this Court. Since that time, the appellants have
appeared and filed the following assignment of errors:
(1) That the circuit court erred in adjudging that the
complainant recover of the respondents the sum mentioned in the
decree or any sum whatever.
(2) That the said court erred in adjudging that the appellants
be debarred from any share in the estate of the bankrupts.
(3) That the said court erred in not deciding that the
proceedings in bankruptcy were wholly void and of no effect on the
ground that the district court had no jurisdiction of the petition
because the petitioner was not a creditor of the bankrupts.
(4) That the said court erred in not deciding that the bankrupt
proceedings were wholly void and of no effect on the ground that
the proceedings were fraudulently instituted
Page 88 U. S. 418
and prosecuted.
(5) That the said court erred in deciding that the goods were
transferred to the appellants in a manner to constitute a violation
of any provision of the Bankrupt Act.
Viewed in the light of the assignment of errors, the objections
to the decree of the circuit court embody three affirmative
propositions, as follows:
(1) That the proceedings in bankruptcy were void and of no
effect for the reasons which are set forth in the third and fourth
assignments.
(2) That the decree is in favor of the wrong party for the
reasons set forth in the first and fifth assignments of errors.
(3) That the proof did not warrant the court in adjudging that
the respondents should be debarred from any share in the bankrupts'
estate.
I. Even a slight examination of the transcript will be
sufficient to show that neither of the alleged errors is apparent
in the record of those proceedings, nor is there anything apparent
in the record which affords any support whatever to either of the
alleged objections. Instead of that, the record shows that the
petition in bankruptcy was in due form and that all the proceedings
antecedent to the decree adjudging the debtors to be bankrupts were
regular and in strict conformity to the Bankrupt Act; nor is it
pretended that there was any irregularity in the proceedings which
led to the appointment of the assignee or in his administration of
the bankrupts' estate or in the assignment and conveyance of the
same to him as required and directed by the fourteenth section of
the Bankrupt Act.
Such an objection, if made, could not be sustained, as the
petition in bankruptcy is set forth at large in the transcript, and
it was admitted by the respondents in open court that the debtors,
on the day heretofore named, were adjudged bankrupts by the said
district court upon the petition of the creditor named in the
petition, and the express admission is that the adjudication was
made in the ordinary manner upon default, and that an assignment of
their effects was made in due from to the assignee. Every pretense,
therefore, that there is any such error apparent in
Page 88 U. S. 419
the record is foreclosed by the stipulation contained in the
transcript.
Attempt is made in argument to maintain the first proposition by
reference to the evidence reported in the record, but it is clear
that the parts of the evidence referred to, when properly
understood, afford no countenance to any such theory. What the
respondents assume is that the evidence warrants the conclusion
that the insolvents were not indebted to the petitioning creditor,
and that the proceedings in bankruptcy were instituted and
prosecuted by the petitioner in collusion and with the consent and
approbation of the insolvent debtors, but it is demonstrable that a
proper analysis and construction of the parts of the evidence
invoked to sustain that issue will show that the whole theory is
utterly destitute of any foundation.
Unexplained, it may be admitted that the act of the petitioning
creditor in discharging his claim against his sons at the time the
respondents purchased their stock of goods would afford some
support to the assumed theory, but it is quite obvious that the
evidence of that act, when weighed in connection with the attending
circumstances, proves the very reverse of the theory it is invoked
to support. Sufficient appears in the circumstances under which
that discharge was given to show that it was procured by the false
representations and the gross fraud and deception of the
respondents, or of the senior partner of their firm, and that he
was acting for the benefit of his partner as well as of
himself.
By the pleadings and proofs, it appears that the respondents are
wholesale clothing merchants doing business in Rochester, in the
State of New York, and that the insolvent debtors mentioned in the
bill of complaint, prior to the sale of their stock of goods to the
respondents, were retail traders engaged in business at Hudson, in
the State of Michigan, owning a stock of goods consisting of such
articles of merchandise as those before mentioned, of the value of
$4,000. They owed the respondents $4,500, and were largely in debt
to other creditors, amounting in the whole, as estimated by the
senior partner of the respondent firm, to the sum of
Page 88 U. S. 420
$8,000. Prior to the sale of their stock of goods to the
respondents, or about the time they commenced business, they
borrowed $2,500 of their father, no part of which was ever paid,
except the sum of $300 of the principal.
Enough appears to show that the respondent firm became fearful
that their debtors would not be able either to pay their debts or
to continue their business, and that it was very desirable to
enforce payment or to procure security. Doubtless it was such
motives that induced the senior partner to make a trip to the place
where the insolvent debtors were doing business. Before going
there, however, he made a short visit to his brother-in-law, who
resides forty miles beyond the place where his insolvent debtors
lived. As shown in the proofs, on his return, he called at the
store of his debtors, the elder of the two being present, the other
being sick at his dwelling house. Conversation ensued in respect to
the pecuniary condition of the debtor firm, and the creditor
informed the partner present that he came to look over their
matters, and he was permitted to examine the goods on hand and to
look over their books. Estimates were made by each of them as to
the value of the stock, and as they differed in opinion as to its
value, they concluded to make an inventory of the same, which was
done, and they also computed the debts of the debtor firm and found
that their indebtedness amounted to $8,000, including the amount
due to their father. Having completed the examination of the goods
and of the books, the respondent remarked that they had got only
four or five thousand dollars to pay their whole indebtedness,
amounting to $8,000, and added to the effect that if they did not
pay, he should remain, and on Monday would throw them into
bankruptcy. He did remain, and on the following day (Sunday), dined
with his debtors at their dwelling house, the junior member of the
firm being still confined to the house. Monday came, but he did not
attempt to institute proceedings in bankruptcy, but proposed that
they should sell their whole stock of goods to some third person,
to be named by him, for the benefit of his firm, and to induce the
debtors to accept the
Page 88 U. S. 421
proposal he accompanied it with the assurance that they, the
debtors, should remain in possession of the goods as the agents of
the purchasers, to sell the goods on commission, as alleged in the
bill of complaint, and that his firm or their agent, the nominal
purchaser, would, from time to time, furnish them with additional
goods to replenish their stock, to be held and sold by the
insolvent debtors on the same terms.
Embarrassed as the owners of the goods were, they were pretty
easily persuaded by the threats of the respondent and by the false
and fraudulent promises and assurances, made in behalf of the
respondents, to accept the deceptive, alluring, and fraudulent
proposals. Objections, indeed, were at first made by the owners of
the goods, and one of them inquired of his wily creditor what they
should do when their other creditors presented their bills for
payment, but the artful negotiator soon silenced every misgiving of
that sort by the fraudulent suggestion as follows: "Pay no
attention to them; they can't collect anything."
Difficulties in that quarter having been overcome, it only
remained to dispose of the debt which the young men owed to their
father. Expedients to accomplish that end were soon devised by the
unscrupulous creditor. He advised the young men to communicate with
their father, and that he and they, or one of them, should
immediately go to the place of the father's residence in order to
induce him to relinquish his claim, so that the proposed
arrangement could be safely carried into effect. Measures were
immediately adopted to notify the father and the brother-in-law of
the respondent, who resided in the same place, of their intended
visit, for which purpose the respondent sent a telegram to his
brother-in-law, of the following terms: "Expect me next train. Tell
the lawyer to be in his office." Information of the intended visit
was also communicated to the father by the elder son, who was
authorized to act for his partner as well as for himself.
On their arrival at the depot of the place of destination, they
were met by the brother-in-law of the respondent, who
Page 88 U. S. 422
had previously been designated as "the third person" to whom the
stock of goods was to be conveyed. Notice of their arrival was
given to the father by his son, and they went immediately to the
office of the attorney-at-law referred to in the telegram sent by
the respondent, and there they met the respondent and his
brother-in-law.
Nothing remained to be done to render the scheme successful
except to dispose of the debt of the father. Plausible arguments to
promote that purpose were presented by the respondent. He commenced
the conversation by artful explanations to show that the
arrangement suggested was essential to save the insolvent debtors
from ruin, saying that the boys were in a bad condition; that he
was anxious to help them; that he did not want to see them thrown
out of business.
Inquiry was then made of him by the father of the debtors, what
he proposed to do; to which he promptly replied to the effect
following: that he proposed to buy the stock of goods and run the
store himself, through a third party, retaining the young men to
conduct the business the same as they had done; that he and his
partner would restock the store with such goods as they should
need, and keep it stocked for the time proposed to the debtors, and
repeated all the promises and assurances previously made and given
to the insolvent debtors, among which were the promise and
assurance that the debtors should remain in possession of the goods
and be constituted the agents of the purchasers to sell the same,
and that they should receive to their own use the net profits of
the sales, and should also have their living out of the
business.
Beyond all doubt, these insidious remarks were intended as an
introduction to the proposition to be made to the father of the
debtors, which was that in order to effect the arrangement, it
would be necessary that he should withdraw his claim, so that the
purchasers would not be exposed to any trouble in carrying out the
proposal until they should get their pay, when the goods should
revert to the debtors. Alluring and plausible as these suggestions
were to the father
Page 88 U. S. 423
of the insolvent young men, still he inquired in reply whether
he ought not to have some writing to insure the performance of the
stipulations on the part of the purchasers of the goods, but the
respondent immediately remarked that nothing of the kind was
necessary; that he had always done by the boys as he agreed and
always intended to do so.
Suffice it to say that the colloquy was continued for some time,
during which one or two writings were drawn, which were destroyed
because they were not satisfactory, and the negotiation terminated
in the adoption of the original proposal made by the respondent,
without any writing's being given to secure the promises and
assurances given either to the father or the owners of the stock of
goods. They, the owners of the goods, executed a bill of sale of
the same to the brother-in-law of the respondent, the price being
fixed at $3,482.34, and he paid the consideration by a draft for
$500, a check for $170.59, cash $200, and three notes signed by the
nominal purchaser, each for the sum of $870.60. Care was taken at
the time that the whole consideration, including the draft, check,
money, and notes, should be delivered to the representative of the
insolvent debtors, but the evidence shows that he, the debtor,
immediately passed over the whole amount to the respondent, who
gave a discharge of the debt of his firm. By this contrivance, the
respondent, through his brother-in-law, became the purchaser of all
the stock in trade belonging to the insolvent debtors, which he
accepted as a full payment of the debt due to his firm. Agreeably
to the arrangement, the father of the debtors also withdrew his
claim and executed a discharge to his sons for the same without
being paid over to the amount of a dollar.
Steeped in fraud as the transaction was, the Court here does not
hesitate to decide that the discharge procured from the father of
his debt against his sons is null and void, and that when he found
that all the promises and assurances made and given by the
respondent were broken, and that they were evidently never intended
to be performed, he had a right to regard his debt as in full
force. Proof of a more
Page 88 U. S. 424
satisfactory character to establish that proposition can hardly
be imagined than that which is exhibited in the record.
Before the week elapsed, the nominal purchaser of the goods
visited the bankrupts at their place of business, and pretending
that he had been deceived by them in respect to a lien on the
goods, procured from them an assignment of their books, and failing
to induce them to turn over to him the only cow they owned, he
demanded the goods, and the debtors having refused to deliver the
same, he sued out a writ of replevin and took the same into his
possession, leaving them stripped of everything except the cow,
which they refused to convey.
Examined in connection with the attending circumstances, it is
manifest that the discharge of the debt procured from the father is
null and void because it was obtained by gross deception,
misrepresentation, and shameless fraud. Mingled threats and
promises induced the insolvent debtors to accept the proposal of
the respondent, and every candid and impartial investigator of the
facts given in evidence must admit that it was the same appliances
strengthened by the desire of the father that his sons might be
able to continue in business that induced him to execute the
discharge. Twenty-two hundred dollars of the principal lent by him
to his sons were still due to him, and he was not paid one dollar
for the discharge on the occasion. Nor is there any better
foundation for the charge that the proceedings in bankruptcy were
instituted and prosecuted in collusion with the bankrupts and with
their consent and approbation, as the charge is not supported by
any satisfactory evidence.
II. Suppose that is so, still it is insisted that the
complainant is not entitled to maintain the suit because the decree
adjudging the debtors to be bankrupts was procured by fraud.
Support to that proposition is not found in any defect in the
decree of the district court where it was entered, nor in any of
the proceedings which led to it, nor is any reference made in the
assignment of errors to the evidence invoked to establish the
proposition, unless it be to the charge
Page 88 U. S. 425
that the insolvent debtors were not indebted to the petitioning
creditor, which has already been shown to be without any just
foundation.
Defects of the kind should be specifically pointed out, and if
they consist of matters of fact, the evidence to support the
assignment should be the subject of distinct reference; but the
Court is not inclined to rest the decision upon any imperfections
in the assignment of errors. Influenced by that determination, the
whole evidence reported has been examined, and our conclusion is
that the proposition is not proved. Nor is the Court inclined to
stop there, as we are all of the opinion that the decree of the
district court in such a case is conclusive of the fact decreed
unless when it is called in question in the court where it was
entered or by some direct proceeding in some other court of
competent jurisdiction.
Jurisdiction is certainly conferred upon the district court in
such a case if the petition presented sets forth the required facts
and the court upon proof of service thereof finds the facts set
forth in the petition to be true, and it is equally certain that
the district court has jurisdiction of all acts, matters, and
things to be done under and in virtue of the bankruptcy until the
final distribution and settlement of the estate of the bankrupt and
the close of the proceedings.
Power, it is true, is vested in the circuit courts in certain
cases to revise the doings of the district courts, and in certain
other cases an appeal is allowed from the district court to the
circuit court, but it is a sufficient answer to every suggestion of
that sort that no attempt was made in this case to seek a revision
of the decree in any other tribunal. Nothing of the kind is
suggested, nor can it be, as the record shows a regular decree,
unrevised and in full force.
Grant that and still the proposition is submitted that it may be
assigned for error that it was procured by fraud, and that such an
assignment is valid, even though the decree was introduced as
collateral evidence in a suit at law or in equity. But the Court
here is entirely of a different opinion,
Page 88 U. S. 426
as the district courts are created by an act of Congress which
confers and defines their jurisdiction, from which it follows that
decrees rendered in pursuance of the power conferred are entitled
in this Court to the same force and effect as the judgments or
decrees of any domestic tribunal, so long as they remain unreversed
or not annulled. [
Footnote
4]
Foreign judgments, by the rules of the common law, were only
prima facie evidence of the debt adjudged to be due to the
plaintiff, and every such judgment was open to examination, not
only to show that the court in which it was rendered had no
jurisdiction of the subject matter, but also to show that the
judgment was fraudulently obtained. Domestic judgments, under the
rules of the common law, could not be collaterally impeached or
called in question if rendered in a court of competent
jurisdiction. [
Footnote 5] It
could only be done directly by writ of error, petition for new
trial, or by bill in chancery. [
Footnote 6] Third persons only, says Saunders, could set
up the defense of fraud or collusion, and not the parties to the
record, whose only relief was in equity, except in the case of a
judgment obtained on a cognovit or a warrant of attorney. [
Footnote 7]
Judgments of any court, it is sometimes said, may be impeached
by strangers to them for fraud or collusion, but the proposition as
stated is subject to certain limitations, as it is only those
strangers who, if the judgment is given full credit and effect,
would be prejudiced in regard to some preexisting right who are
permitted to set up such a defense. Defenses of the kind may be set
up by such strangers. Hence the rule that whenever a judgment or
decree is procured through the fraud of either of the parties, or
by the collusion of both, for the purpose of defrauding some third
person, such third person may escape from the injury thus
attempted
Page 88 U. S. 427
by showing, even in a collateral proceeding, the fraud or
collusion by which the judgment was obtained. [
Footnote 8]
Third persons only, however, can set up such a defense, as the
rule is well settled that neither the parties nor those entitled to
manage the cause or to appeal from the judgment are permitted to
make such defense in any collateral issue. [
Footnote 9]
Unquestionably a judgment may be impeached for the purpose of
showing that it was procured by the debtor for the purpose of
avoiding the operation of the Bankrupt Act. Evidence for that
purpose is admissible to show:
(1) That it was procured within four months prior to filing the
petition in bankruptcy, and with a view of giving the plaintiff a
preference over the other creditors.
(2) That the debtor was insolvent at the time.
(3) That the plaintiff had at the time reasonable cause to
believe that the defendant was insolvent, and that he procured the
judgment to give the plaintiff such a preference. [
Footnote 10]
Competent evidence is admissible to prove those facts, but a
judgment is no more liable to collateral impeachment in proceedings
under the Bankrupt Act, except for the purpose of showing that the
judgment in question was designed as a means of avoiding the equal
distribution of the debtor's estate among his creditors than it is
to such impeachment in the courts where it was rendered. [
Footnote 11]
Power to establish uniform laws upon the subject of bankruptcy
throughout the United States is conferred upon Congress, and
Congress having exercised the power, it has become
Page 88 U. S. 428
an exclusive power. By the Act of Congress, the jurisdiction to
adjudge such insolvent debtors as are described in the thirty-ninth
section of the act to be bankrupts is vested in the district
courts, and it follows that such a judgment is entitled to the same
verity, and is no more liable to be impeached collaterally than any
other judgments or decrees rendered by courts possessing general
jurisdiction, which of itself shows that the case before the court
is controlled by the general rule that where it appears that the
court had jurisdiction of the subject matter and that the defendant
was duly served with process or voluntarily appeared and made
defense, the judgment is conclusive and is not open to any inquiry
upon the merits. [
Footnote
12]
Exactly the same rule is applicable to the case before the
Court, as it is clear that the district court had jurisdiction of
the petition and that there is not even a suggestion that the
notice required by law was not given as the law directs. [
Footnote 13]
Such a decree adjudging a debtor to be bankrupt is in the nature
of a decree
in rem as respects the status of the party,
and in case the court rendering it has jurisdiction, it is only
assailable by a direct proceeding in a competent court, if due
notice was given and the adjudication is correct in form. [
Footnote 14]
III. Preferences as well as fraudulent conveyances, if made
within four months before the filing of the petition by or against
the bankrupt, are forbidden by the Bankrupt Act; but three things
must concur in order that the transaction
Page 88 U. S. 429
may come within the prohibition and be affected by it as an
illegal payment, security, or transfer:
(1) That the payment, pledge, assignment, transfer, or
conveyance was made by the bankrupt within the period mentioned and
with a view to give a preference to one or more of his creditors,
or to a person having a claim against him, or who was under some
liability on his account.
(2) That the person making the payment, pledge, assignment,
transfer, or conveyance was insolvent or in contemplation of
insolvency at the time the preference was secured.
(3) That the person receiving such payment, pledge, assignment,
transfer, or conveyance, or to be benefited thereby, had reasonable
cause to believe that the person was insolvent and that the
payment, pledge, assignment, transfer, or conveyance was made in
fraud of the provisions of the Bankrupt Act. [
Footnote 15]
Creditors are forbidden to receive such a preference from such a
debtor, and the provision is that if such a debtor shall be
adjudged a bankrupt, the assignee may recover back the money or
other property so paid, conveyed, sold, assigned, or transferred
contrary to that act, provided the person receiving such payment or
conveyance had reasonable cause to believe that a fraud on the
Bankrupt Act was intended, or that the debtor was insolvent; and
the farther provision is that such creditor shall not be allowed to
prove his debt in bankruptcy. [
Footnote 16]
Evidently that part of the decree which is the subject of the
third complaint is founded upon that provision, and inasmuch as the
facts exhibited in the record bring the case in all respects within
the regulation there prescribed, it is clear that it was competent
for the circuit court to render such a decree, and the Court here
sees no reason to question the action of the circuit court.
Decree affirmed.
[
Footnote 1]
Stated
infra, p.
88 U. S.
408.
[
Footnote 2]
Infra, p.
88 U. S.
408.
[
Footnote 3]
14 Stat. at Large 536.
[
Footnote 4]
Parker v. Danforth, 16 Mass. 299;
Pecks v.
Barnum, 24 Vt. 76; 2 Smith's Leading Cases, 7th edition,
814.
[
Footnote 5]
Lord v. Chadbourne, 42 Me. 429.
[
Footnote 6]
Cammell v. Sewell, 3 Hurlstone & Norman 617.
[
Footnote 7]
2 Saunders on Pleading and Evidence, part 1, p. 63;
Christmas v.
Russell, 5 Wall. 304.
[
Footnote 8]
Crosby v. Leng, 12 East 409;
Insurance Co. v.
Wilson, 34 N.Y. 281;
Hall v. Hamlin, 2 Watts 354;
Pond v. Makepeace, 2 Metcalf 116;
Sidensparker v.
Same, 52 Me. 488.
[
Footnote 9]
Homer v. Fish, 1 Pickering 435;
Railroad Co. v.
Sparhawk, 1 Allen 448;
Atkinson v. Allen, 12 Vt. 624;
Granger v. Clark, 22 Me. 130;
Hammond v. Wilder, 25
Vermont, 346; Coit v. Haven, 30 Connecticut, 198; Hollister v.
Abbott, 11 Foster 448; 2 Philips on Evidence 80, note 291 (5th
Am. ed.);
Christmas v.
Russell, 5 Wall. 306;
Peck v. Woodbridge,
3 Day 30.
[
Footnote 10]
Buchanan v.
Smith, 16 Wall. 277;
Wager
v. Hall, 16 Wall. 590.
[
Footnote 11]
Palmer v. Preston, 45 Vt. 159.
[
Footnote 12]
2 Smith's Leadings Cases (7th ed.), p. 622; Freeman on Judgments
(2d ed.), sec. 606;
Hampton v.
McConnel, 3 Wheat. 234;
Nations v.
Johnson, 24 How. 203;
D'Arcy
v. Ketchum, 11 How. 166;
Webster v.
Reid, 11 How. 460.
[
Footnote 13]
In re Robinson, 6 Blatchford 255;
Wimberly v.
Hurst, 33 Ill. 172;
Corey v. Ripley, 57 Me. 69;
Ocean Bank v. Olcott, 46 N.Y. 15;
Fortman v.
Rottier, 8 Ohio St. 556;
Revell v. Blake, L.R., 7
C.P. 308.
[
Footnote 14]
Way v. Howe, 108 Mass. 503;
Ex Parte Wieland,
L.R., 5 Ch.App. 489;
Woodruff v. Taylor, 20 Vt. 65;
Mankin v. Chandler, 2 Brockenbrough 126;
Shawhan v.
Wherritt, 7 How. 643,
Imrie v. Castrique,
8 C.B.N.S. 407;
Carter v. Dimmock, 4 H.L.Cas. 346.
[
Footnote 15]
Wager v.
Hall, 16 Wall. 595;
Scammon v. Cole, 5
N.B.R. 259.
[
Footnote 16]
14 Stat. at Large 536.